Oracle Corporation (ORCL)
Profitability ratios
Return on sales
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 95.98% | 71.41% | 72.85% | 79.08% | 80.59% |
| Operating profit margin | 30.80% | 28.99% | 27.37% | 37.31% | 38.67% |
| Pretax margin | 24.67% | 22.17% | 18.27% | 18.02% | 32.11% |
| Net profit margin | 21.68% | 19.76% | 17.02% | 15.83% | 33.96% |
The profitability ratios of Oracle Corporation over the specified periods reveal notable trends and insights into the company's fiscal performance.
Starting with the gross profit margin, there is a general decline observed from 80.59% on May 31, 2021, to 71.41% on May 31, 2024, with a significant increase to 95.98% projected for May 31, 2025. This downward trend from over 80% to below 72% indicates a reduction in the company's efficiency in controlling direct costs relative to sales. Such a decline may reflect increased costs of goods sold or pricing pressures in the market, but the spike in the 2025 estimate suggests an anticipated improvement or strategic cost management.
The operating profit margin exhibits a similar pattern, declining from 38.67% in 2021 to a low of 27.37% in 2023. It slightly recovers to approximately 28.99% in 2024 and is projected to increase to 30.80% in 2025. This suggests that while operating efficiency has diminished, efforts or favorable conditions are expected to improve operational profitability in the near future.
Pre-tax margins have experienced fluctuations, starting at 32.11% in 2021, dropping sharply to 18.02% in 2022, remaining relatively flat at 18.27% in 2023, then increasing to 22.17% in 2024 and further to 24.67% in 2025. The initial decline indicates a narrowing of pre-tax profitability, potentially influenced by higher operating costs, interest expenses, or other non-operational factors, but the subsequent upward trend indicates improved pre-tax efficiency and cost management.
The net profit margin reflects the bottom-line profitability performance. It decreased markedly from 33.96% in 2021 to 15.83% in 2022, then saw a modest recovery to 17.02% in 2023 and continued improvement to 19.76% in 2024, reaching approximately 21.68% projected for 2025. This pattern suggests that while profitability was under pressure in 2022, Oracle has been able to regain profitability levels, with the expectation of further strengthening in the coming years.
Overall, Oracle's profitability ratios depict a period of initial decline across multiple metrics, followed by a trend of recovery and anticipated improvement. The substantial jump in gross profit margin and net profit margin projections for 2025 indicate optimistic expectations for future profitability, possibly driven by strategic initiatives, cost reductions, or revenue growth initiatives.
Return on investment
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.50% | 10.89% | 10.17% | 14.49% | 11.94% |
| Return on assets (ROA) | 7.39% | 7.42% | 6.33% | 6.15% | 10.48% |
| Return on total capital | 0.00% | 177.40% | 822.37% | — | 262.99% |
| Return on equity (ROE) | 59.34% | 120.26% | 546.47% | — | 230.95% |
The provided data indicates a fluctuation in Oracle Corporation's profitability ratios over the period from May 2021 to May 2025.
The Operating Return on Assets (Operating ROA) experienced an upward trend from 11.94% in May 2021 to a peak of 14.49% in May 2022, followed by a decline to 10.17% in May 2023. It subsequently showed slight recovery, reaching 10.89% in May 2024, and settled at 10.50% in May 2025. This pattern suggests that operational efficiency improved notably in 2022 but softened in subsequent years, with margins stabilizing at a lower level.
In contrast, the Return on Assets (ROA), which measures overall profitability relative to total assets, decreased from 10.48% in May 2021 to 6.15% in May 2022, then marginally increased to 6.33% in May 2023. The upward movement continued into 2024 to 7.42% and slightly declined again to 7.39% in 2025. The pattern indicates a dip in asset profitability during 2022, with modest recovery and stabilization thereafter.
The Return on Total Capital exhibits more variable results, with a substantial peak of 822.37% in May 2023, compared to a notably high 262.99% in 2021 and a significant decrease to 177.40% in 2024. Notably, the figure for May 2025 is recorded as 0.00%, which may imply a reporting anomaly or specific accounting adjustments. The sharp fluctuations suggest variability in how effectively the company leverages total capital over the years.
Return on Equity (ROE) shows a marked increase from 230.95% in May 2021 to an exceptional 546.47% in May 2023, indicating highly profitable equity utilization during that period. Thereafter, ROE declined to 120.26% in 2024 and further to 59.34% in 2025, signifying a reduction in shareholders' return but remaining positive. The decline in ROE over the last two years could reflect changes in net income, equity base, or leverage.
Overall, the ratios depict a company with historically high profitability margins that peaked around 2023, followed by a decline but sustained profitability. The data suggest that Oracle's operational efficiency and return on equity were significantly elevated in recent years, though recent figures point to a moderation. The anomalies in the total capital return ratio warrant further investigation to understand underlying accounting or reporting adjustments.